Links to Consider, 3/29
Niccolo Soldo on Canada; Moses Sternstein describes the economy; Jonathan Haidt is everywhere; Erik Hoel on the essence of the online age; Brian Doherty on Jennifer Burns' biography of Milton Friedman
An economy based around resource-extraction and burdened down by high taxation and significant barriers to entry, productivity has trended downwards since the 1980s. Even though Canada has everything that a person or family could want in terms of purchasing, it is not an attractive place for capital markets when compared to the USA, China, or even Germany. This has led to a stagnation, one that has seen Canadians become poorer when compared to their immediate neighbour to the south.
Soldo makes it sound as if Canada’s deep state is worried that a stagnant economy could cause unrest, and to prevent this a strong censorship regime is required. If they would read Martin Gurri’s Revolt of the Public, they would see that attempted censorship is precisely the wrong response.
The National Nursing home method works like this: Uncle Sam borrows trillions of dollars from our grandchildren to pay millions of newly minted quasi-americans to provide healthcare to a steadily growing class of retirees. Voila. It’s Healthcare Domestic Product!
Interest rates are high, but everybody with long-term assets avoids taking losses by not selling: home owners with houses that potential buyers cannot afford; banks with long-term securities that nobody else wants; and VCs/private equity with investments in firms that are not doing well enough to justify their valuations.
The implication of Sternstein’s description is that a lot of economic activity is unsustainable. I wonder if the “winner” of the November election is just going to wind up presiding over the chickens coming home to roost.
Jonathan Haidt’s latest book came out, and you can’t miss it. Haidt and Zack Rausch write,
Today is also the launch day of a movement in the U.S., the UK, and other nations to Free the Anxious Generation by rolling back the phone-based childhood, restoring the play-based childhood, and reclaiming life in the real world.
David Epstein talks with Haidt.
NYU social psychologist Jonathan Haidt argues that the transition from a play-based childhood to a phone-based childhood has been an epochal disaster for the cognitive and social development of young people.
And on Bari Weiss’ channel, Haidt writes,
What the smartphone user gives up is time. A huge amount of it.
Around 40 hours a week for preteens like your daughter. For teens aged 13 to 18, it’s closer to 50 hours per week. Those numbers—six to eight hours per day—are what teens spend on all screen-based leisure activities.
I look forward to reading the book, and also to reading any serious critical reviews.
The most interesting commentary I have read so far, which uses Haidt more as a jumping-off point than a central focus, comes from Clinton Ignatov. If Ignatov is correct, then the smart phone is not uniquely transformative. The entire computer/communications revolution is geared toward taking humans into an internal world, away from the ordinary external world.
At the beginning of the 21st century there was a new thesis, one created by technological developments that brought the majority of the population online. This changed the consciousness of all of us permanently. That thesis was the mob.
Then, currently developing in reaction, there is the antithesis: the sovereign individual. The ones who stand above the mob.
The end of the 21st century, if not in year then in spirit, will occur when these forces are reconciled. When a synthesis is found that establishes liveable peace between individuals and the mob.
…If we were to compare the psychological topography of two citizens, one living in the 1990s, and one living in the 2020s, the most significant difference is that only one lives with the oppressive knowledge that they are watched by a panopticon.
David Brin (The Transparent Society) would say that we need a new ethic of politeness. Even though I can notice you saying or doing things I do not like, I need to learn to ignore it rather than join a mob attacking you.
Brian Doherty and I discuss Jennifer Burns' recent biography of Milton Friedman, titled The Last Conservative. We appreciate the effort she undertook to appreciate Friedman’s contributions in economics. Brian points out that she undersells his libertarianism.
substacks referenced above:
@
@
@
@
@
@
@
Thanks, Prof Kling! These were all fascinating (tho I read Nic regularly)
1. Re Nic on Canada. Sorry, the Canada Deep Staters are not going to read Gurri's book, and their fear will drive them in increasingly authoritarian directions, including stifling speech, until something (e.g. the economy) breaks. Then what happens? I have no idea.
2. Re Moses on National Nursing Home. Lacks historical perspective. I'm old enough to have cut my finance teeth when Prime was 20%, so to call current interest rates high is laughable. On the other hand, he's right about finance bros & ZIRP. ZIRP was a huge historical interest rate aberration that I hope will not be repeated (although it's so tempting for Government & Business to do so that I fear it will).
3. Clinton brings a much-needed historical perspective (if laden with too much front-end theorizing before he gets to the meat, although I was amused to see Behaviorism described as an "obscure psychological theory"--how the mighty have fallen). Also good to see someone cite McLuhan again! I lived through the '80s & '90s in the avant-garde cyber movement in Berkeley (via Mondo 2000, which he doesn't mention), so all the '90s references make perfect sense to me. That they are ignored is part of the larger problem of presentism that plagues our era.
4. This applies to the whole Haidt mobile phone discussion. Back in the '90s, the paranoid, helicopter, over-scheduled parenting style was already becoming the norm across the educated classes. Peter Gray https://substack.com/@petergray takes a wider view, that it's not just the phones but the decline of free play for children (I was lucky to grow up under free play) from the '50s through today. No point in taking away kid's phones just to subject them to more parental control & scheduling! Kids cannot learn freedom unless you let them be free & that seems to be anathema for most parents.
My gut wants to agree with Sternstein mostly due to BLS employment releases that frequently cite fast growth in the home health and personal care aides occupation, but I have doubts. Supporting Sternstein is a recent BLS employment projection report states:
“Healthcare support occupations are projected to grow the fastest of all occupational groups, at 15.4
percent from 2022 to 2032. In addition to growing rapidly, one occupation from this group, home health and personal care aides, is also projected to experience the largest increase in new jobs of any occupation over the 2022-32 projections period. Projected to gain 804,600 jobs, this occupation is projected to account for approximately 1 of every 6 new jobs, and by 2032, would represent the largest occupation in the economy. The growing elderly population, which typically has increased healthcare needs compared to younger groups, will in turn increase demand for caregiving and therapy services.”
(https://www.bls.gov/news.release/ecopro.nr0.htm “
And one can’t deny that the federal government seems to be borrowing at an unsustainable rate:
https://fred.stlouisfed.org/series/GFDEGDQ188S Nor can one deny that there are “millions of newly minted quasi-americans” but how many millions? However, it seems that nobody really has a meaningful grasp of what the US population actually is within plus or minus 20 million, maybe even double that. US population figure estimates really out to be rounded to the nearest 10 million. Anything else seems like spurious specificity.
And as with everything else, there seems to be divergences in figures reported by different sources. I saw one source that claimed skilled nursing and elderly care employment peaked in 2019 and is down now 8% from then and declined 1% from 2022 to 2023. https://www.healthsystemtracker.org/chart-collection/what-are-the-recent-trends-health-sector-employment/ Residential care is about 5% of the national health expenditure and home health care about 3%.
Data that might not support Sternstein’s argument, include the current balance status of the Disability Insurance and Medicaid trust funds and their receipts and outlays. The Disability Insurance (DI) Trust Fund is projected to be able to pay 100 percent of total scheduled benefits through at least 2097, the last year of this report's projection period. The The Supplemental Medical Insurance (SMI) Trust Fund is adequately financed into the indefinite future because, unlike the other trust funds, its main financing sources--premiums on enrolled beneficiaries and federal contributions from the Treasury--are automatically adjusted each year to cover costs for the upcoming year.
And let’s put this in a broader context as well and note that the national health expenditure as a share of GDP has declined recently as well, with health care spending as a share of GDP declining form 18.8% in 2020 to 17.4% in 2021 and then 16.6% in 2022
The number of facilities, the number of their residents, and the amount of healthcare delivered in them are all reported as declining significantly as well. https://www.kff.org/medicaid/issue-brief/a-look-at-nursing-facility-characteristics/ And the number of residents is actually not all that great to begin with, estimated at about 1.2 million with the average annual cost for a resident at about $120,000, so multiplying those two numbers only gets you to 144 billion which is a big number but not so enormous when compared to the $6.3 trillion the central government spent in 2023.
Medicaid is the largest federal funder of eldercare but states pay up to 50% of the cost of the program.
Medicare, oft accused of being the root of all budgetary evil, accounts for about 10 percent of federal government outlays annually and its assisted living benefit is capped at 20 days, covering about 13% of the total population of facility residents. Both are funded out of the HI Trust Fund. The most recent Trustees Report for 2023 shows the HI Trust Fund started with end of year 2021 reserves of $142.7 billion and grew over the year by $43.9 billion ending the year with $196.6 billion, with 2022 income of $396.6 billion and costs of $342.7 billion. And again, this against total federal spending of $6.13 trillion in 2022.
And at least one source claims that, “A large majority of residential long-term care workers (80.9%) are women. This includes a disproportionate employment of Black women (who make up 22.4% of this industry compared with 6.5% of the overall workforce) and immigrant women (12.8%2 compared with 7.2% of the overall workforce)” and that “’Immigrant women’” includes both naturalized U.S. citizens (7.5%) and non-U.S. citizens (5.3%).
So, at least for me, the jury is still out on Sternstein's "Healthcare Domestic Product" model, but I suspect the truth is too nuanced and complex to have any reasonable expectation of being revealed in any US publication our outlet anyway.